Entries in captive reinsurance (1)
Undisclosed income streams exposed ... hopefully!
The era of captive reinsurance represents some of the title industry’s darkest days. It’s saddening to visit an underwriter’s site to find the required language of negotiated settlement agreements and forms for aggrieved consumers to request refunds.
Title insurers, the appointed keepers of public trust, knowingly violated the social mandate that justifies their very existence. Arguably, HUD avoided legitimate requests to clarify its position, but underwriters acquiesced in the silence to pursue an agenda of illegitimate relationships with sources of business.
An article in the Daily Herald draws stark comparisons between the title industry’s version of captive reinsurance and a similar practice applied to mortgage insurance premiums.
It’s a little known fact that mortgage lenders pocket significant portions of “premiums paid by borrowers who cannot afford to make a down payment of 20 percent or more.”
The much awaited revamping of HUD policy is expected to make the flow of dollars more transparent to consumers. A reasonable mind would conclude that disclosure isn’t all that complicated in a real estate transaction. It’s a shame that so many players in the housing arena are more concerned about preserving “quiet” income streams derived from “back room agreements” than they are about dealing fairly with consumers.
Ed Rybczynski
in related industries, title insurance, title industry, title insurance industry, respa, captive reinsurance
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